AppLovin (NASDAQ:APP) shares soared nearly 25% in pre-open Thursday after the company reported Q2 results.
EPS of $0.22 came in better than the consensus estimate of $0.08. Revenue fell 3% year-over-year to $750 million, beating the consensus estimate of $723.97M.
Software Platform revenue increased 28% year-over-year to $406M, representing a quarterly record. The growth was driven by the rollout of the AI advancements to AXON, which drove higher installs and revenue per install from Q1, paired with improved returns for advertisers.
Meanwhile, Apps revenue fell 25% year-over-year to $344M, due primarily to a decline in In-App Purchase revenue.
For Q3/23, the company expects revenue in the range of $780-$800M, above the consensus estimate of $741.41M. Adjusted EBITDA is seen at $340-$360M.
BTIG analysts hiked the price target by $6 to $40 per share following a "significant" beat. They attributed the strong stock reaction to expectations that "didn't feel elevated" going into the print.
BofA analysts also hiked the price target by $6 with a new objective sitting at $41 per share.
"Axon 2.0 has the potential to catalyze a multiyear growth story, whereby AppDiscovery penetrates non-gaming verticals, and Wurl (CTV inventory), takes off," the analysts said.
Additional reporting by Senad Karaahmetovic